22 June 2012

2 minute read

North America

National Beef has been ordered to cease and desist from:

• failing to disclose or make known to livestock sellers an accurate accounting of the cattle purchased by National Beef, including but not limited to failing to adequately identify and correct data errors prior to determining the final pricing of cattle purchased by National Beef pursuant to quality-based pricing grids;
• failing to disclose or make known to livestock sellers, the correct freight charge deductions taken on cattle purchased by National Beef pursuant to quality-based pricing grids;
• failing to disclose or make known to livestock sellers data errors that affect the prices National Beef pays for cattle purchased pursuant to quality-based pricing grids; and
• failing to maintain and operate an accurate scale for the purpose of determining livestock carcass weights including but not limited to operating a scale that fails to meet the applicable accuracy tolerances for dynamic monorail scales contained in the General Code, Scale Code, and Weights Code of the 2009 edition of the National Institute of Standards and Technology (NIST) Handbook 44, “Specifications, Tolerances, and Other Technical Requirements for Weighing and Measuring Devices.

National Beef has been assessed a civil penalty of $32,500.

The consent decision resolves charges that were filed on 11 June, in which GIPSA alleged that, National Beef:

• incorrectly disclosed to livestock sellers the freight charge it was deducting in grid-based pricing calculations;
• used incorrect boxed beef sales data for the week ending 3 May 2008, which resulted in underpayments and overpayments to some producers whose cattle were priced using National Beef’s quality-based pricing grids during the time period of May 5, 2008 through 31 May 2008;
• incorrectly calculated the threshold values that it used in some of its quality-based pricing grids during the time period of 23 June 2008 through 19 July 2008, which resulted in underpayments and overpayments to some producers whose cattle were priced using National Beef’s quality-based pricing grids during that time period; and
• failed to maintain and operate an accurate scale for the purpose of determining livestock carcass weights at National Beef’s slaughter facility in Liberal, Kansas, in that on 11 August, 2010 and 12 August 2010, National Beef’s scale at the Liberal plant failed to meet applicable accuracy tolerances for dynamic monorail scales established by NIST Handbook 44. The use of an inaccurate scale may have resulted in overpayments to some cattle sellers whose cattle were weighed on 11 August 2010, and may have resulted in overpayments and underpayments to some cattle sellers whose cattle were weighed on 12 August 2010.

The P&S Act is a fair trade practice and payment protection law that promotes fair and competitive marketing environments for the livestock, meat, and poultry industries.

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